New policy allows gov’t to seize patents for federally funded drugs

Federally funded drugs patents policy overview: 

• Who: The White House has proposed a new policy that would give federal agencies the ability to seize patents for taxpayer-funded drugs and other inventions that it finds are not reasonably priced.  
• Why: The government said it is proposing the policy in an effort to promote competition in health care and support lowering prescription drug costs. 
• Where: The new policy could impact consumers nationwide. 

The Biden administration proposed new policy last week giving federal agencies march-in rights on taxpayer-funded drugs and inventions, opening the door for the government to seize patents for certain costly medications patents from drugmakers. 

The government said the actions — including the proposed new framework — are being done in an effort to “promote competition in health care and support lowering prescription drug costs for American families.” 

“The Administration believes taxpayer-funded medications should be reasonably available and affordable,” the White House said in a Dec. 7 news release. 

The march-in rights for taxpayer-funded drugs and other inventions would specify that price can be a factor in considering whether a medicine is accessible to the public, according to the White House. 

Allowing the government to take a patent in the event it finds the public is unable to “reasonably” access a medication on account of its price could lead to the development of “lower cost generic alternatives.” 

Research shows lack of competition in drug markets ‘highly correlated’ with higher prices, White House says

The White House cited new research by the Department of Health and Human Services (HHS), which the Biden administration said revealed a lack of competition in drug markets is “highly correlated with higher prices.” 

“Among the highest priced drugs (i.e., those in the top 10% of price per prescription), 89% of small molecule drugs and 100% of biological products had only one manufacturer,” the White House said. 

The goals of the proposed actions include promoting “equitable access” to lower-priced drugs that are funded by taxpayers and launching a “cross-government public inquiry into corporate greed in health care,” among other things. 

The Biden administration said it will also be increasing transparency both in ownership and for Medicare Advantage, with the government noting around half of Medicare enrollment is in the program it says it expects to spend more than $7 trillion on over the next decade. 

It is unclear at this time whether or how a federal agency would use march-in rights on drug patents, according to CNBC, which reports the proposed framework will be open for public comment for 60 days. 

In other news involving HHS, the government agency issued a recommendation earlier this year for the Drug Enforcement Agency to reassign marijuana from a Schedule I substance to the less restrictive Schedule III under federal drug policy. 

Do you believe government agencies should be allowed to seize drug patents? Let us know in the comments.

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